Outsourcing

In the past, outsourcing focused on tactical, nonessential activities such as payroll processing or manned security stations. But the focus is shifting. Strategic operations outsourcing encompasses core activities – such as manufacturing or logistics – that could substantially affect a business if not performed well. The best companies pursue it through a critical reevaluation of their positions along industry value chains, aiming to improve financials in mature businesses. When multiple companies in or around an industry come to the same strategic conclusion, a reinforcing cycle of strategic outsourcing can initiate a fundamental restructuring of entire industries.

I will be writing shortly about Outsourcing in my Tech Talk series on “Tech’s 10X Tsunamis”.